Drought conditions are stubbornly persisting across much of the United States, with several regions seeing modest improvement over the week to May 5, while many continue to deteriorate as an abnormally warm and dry winter extends into spring. Around 61 per cent of the continental United States is in some stage of drought, especially concentrated in the Southeast, High Plains and Western regions.
Somewhat wetter weather brought some drought relief to a few regions at the start of May, mainly in the south, although conditions had deteriorated to such an extent that substantial rainfall will be required to replenish soil moisture and maintain current winter crop yield projections.
Very little, if any, rain fell on the parched central and southern High Plains, heightening concerns for drought-stressed crops and pastures. Beneficial but very scattered precipitation fell in the west, but yielded to warmer, drier weather as the calendar rolled to a new month, promoting an acceleration of fieldwork and crop development.
The dry conditions are competing with geopolitical tensions in the Middle East as the principal market drivers in the US at the moment, pushing prices close to two-year highs late in April. Wheat futures across the three major US bourses posted gains on Friday, although declines across the week erased much of the previous week’s gains as the Trump administration talked up the possibility of an end to the war with Iran.
Chicago soft red winter (SRW) wheat futures increased between 5¾ and 7¾ cents per bushel (US$2.10 – 2.85 per metric tonne) on Friday, although the July contract remained 18¾ c/bu (US$6.90/MT) lower than the previous Friday’s close. Similarly, Kansas City HRW futures saw gains ranging from 7¾ to 11¼ c/bu (US$2.85 – 4.15/MT), despite a weekly decline of 18¾ c/bu (US$6.90/MT) for July. Minneapolis spring wheat closed the week with increases between 4¾ and 7¼ c/bu (US$1.75 – 2.65/MT). However, the July contract in that market posted the sharpest weekly decline among the three complexes, falling 35¾ c/bu (US$13.15/MT) compared to a week earlier.
The forecast of a strong El Niño developing this summer, while potentially alleviating drought conditions in some parts of the country, typically generates unfavourable growing conditions across much of the major corn and spring wheat-growing regions, resulting in lower production and increased market volatility.
Last week’s United States Drought Monitor report indicates that drought now covers 70 per cent of the US winter wheat area and is rapidly approaching the all-time record of 75 per cent set in November 2022, when that season’s winter wheat crop was being seeded. Over 81 per cent of the Southern Plains is experiencing some form of drought, with almost 20 per cent of the region in either “extreme” or “exceptional” drought.
Moderate to extreme drought has gripped the prime hard red winter (HRW) wheat growing areas of western Kansas, eastern Colorado, and the Oklahoma and Texas panhandles for months. Most of these areas received less than 20 per cent of normal precipitation across March and April. Weather forecasts frequently teased, with the promise of improved rainfall invariably disappointing.
The states of Kansas and Oklahoma recorded their second-warmest year on record from March 2025 to March 2026. Temperatures in March of this year were well above normal in many regions, with Kansas reporting the third-warmest March on record, and Oklahoma setting a new high, exacerbating the drought conditions and stressing crops.
The National Oceanic and Atmospheric Administration’s Palmer Drought Severity Index. which uses temperature and precipitation data to provide a longer-term view on soil moisture and drought conditions, hit an all-time low for March for the contiguous US, with records dating back to 1895.
A mid-April cold snap across parts of the Southern Plains further stoked concerns of crop damage, with producers in affected areas continuing to monitor impacts on winter wheat crops that were at or beyond the jointing stage when the freeze hit.
As of May 5, crop conditions in the seven major winter wheat states of Kansas, South Dakota, Montana, Nebraska, Texas, Oklahoma and Colorado sit at an average of 18 per cent good to excellent. While this is up 2 per cent week-on-week, it is well below the national average of 31 per cent. South Dakota had the best conditions at 33 per cent good to excellent, while Colorado was the worst at just 5 per cent. Conditions in Kansas, the largest winter wheat-producing state, came in at 22 per cent good to excellent, down from 23 per cent a week earlier.
One major concern is the advanced state of winter wheat development across the Southern Plains. Kansas is reporting 75 per cent of the crop already at the heading stage, up from 44 per cent a week earlier. This compares to 41 per cent a year earlier and a five-year average of just 28 per cent.
Some Kansas farmers have reportedly already abandoned their HRW crops, with analysts sounding warnings of high abandonment rates across the Southern Plains and a sharp drop in production. As the proportion of the crop rated poor to very poor climbs, abandonment rates generally follow suit.
Crop damage is irreversible in some regions, with farmers cutting their losses by dropping their winter wheat to produce hay, demand for which has increased substantially. Targeting the boot to early-head stage of maturity is considered optimal for both quantity and quality, but crops are so drought-stressed and low in stature in many areas that output is low. Harvesting for silage is also an option for some growers, with grain at the milk to soft-dough stage generally deemed the optimal time to maximise energy and protein content.
Applying current crop ratings and drought-reduced yield estimates to a lowered harvested area pushes total wheat production down by at least 15 per cent from last year. However, as bad as this year’s wheat harvest may be, the US isn’t running out of wheat just yet. Despite the accelerated pace of exports, around 15 per cent ahead of last season, the supply scenario is currently cushioned by last year’s bumper crop.
Call your local Grain Brokers Australia representative on 1300 946 544 to discuss your grain marketing needs.
Written by Peter McMeekin.
